The hot tub drains when the freeze protection engages at 35 degrees

This appears to be the sleep mode, which is a freeze protection mode. You need to get your owner manual out and change the mode to standard so it will heat.

Rod
US Parts Center

The freeze protection thermostat has gone bad.
To confirm this, disconnect wiring from freeze control.

Freeze control can be purchased separately.
Search: Intermatic Freeze Protector
For example, Smarthome:
http://www.smarthome.com/42697/Intermatic-PF1102M-240V-Freeze-Protection-Control-Timer-Mechanism/p.aspx

I am familiar with wiring for Intermatic pool controls.
If you have problem, add a comment with exact model number or photo of product.
http://www.fixya.com/support/r6568559-post_photograph_fixya_questions_answers

Also if you re-post question another question at Fixya with exact model number, I will probably see it.

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Fixya is always less expensive than a service call

Not with the current Firmware Version, sorry.

The freeze control is wired parallel with timer, so both controls can turn Load ON-OFF.
So Load turns ON when either the freeze-control or the timer turns ON.
When both are ON, then Load will be ON.
Freeze control can be ON and timer OFF and Load is ON
Freeze control can be OFF and timer ON and Load is ON.
Only when both Freeze control and timer are OFF, will Load be OFF.

If pump is not turning ON below 32 (or the protection set point), then freeze control thermostat is suspect.
But you need to check if pump turns ON when timer turns ON.
If pump operates with timer, then freeze control is main suspect, unless there is a loose wire.
Open box and check for loose and burned connections.
If pump does not operate with either timer or freeze control, then check for loose wires and also check your circuit breaker and check that pump is operable.

To find replacement freeze control, Google search: Intermatic freeze protection thermostat

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Most hot tubs have a freeze protection that will lock you out and run the pumps full blast with no heater if the temerature is under 50 degrees F.The circulating pumps create heat until the water temp is above 50 degrees, and then the heater will come on after that.
Hot tubs do this to protect themselves and it is normal operation.

This is normal with the dream maker spa. The dream maker spas are poorly insulated, and only run 120 volts with a very small heater.
When the unit is first filled, the hot tub will not heat full time either. Most new hot tubs will have freeze protection below 50 degrees F. They will recirculate automatically using the friction and the pumps heat to warm the water above 50 degrees, and then the heating unit will kick on. These hot tubs do not heat while the jets are on high either, so once you are in it using the jets on high, the temperature will start to fall.

Now that you are up to 80 degrees, it should heat up fairly quick however.

After refiling a spa, typicall the water is below 50 degrees F. Spas have a freeze protection in their programming so that when the water is that cold, the pumps run constantly to keep it from freezing. It will correct itself